Learning Resources, Inc. v. Trump

On February 20th, the Supreme Court Ruled 6-3 against the President of The United States of America. This ruling was not significant because it involved the President but rather because it answered a question with trillion-dollar stakes. 

Early in his second term, President Trump invoked the International Emergency Economic Powers Act (IEEPA) to justify two waves of tariffs. Trump used the act, passed in 1977, to target duties linked to fentanyl trafficking from countries such as Canada, Mexico, and China. The tariffs were also meant to impact dozens of separate countries, causing small businesses such as toy company Learning Resources to sue, citing that IEEPA was never meant to authorize taxation at all. 

Given the current state of sweeping tariffs, the Supreme Court granted certiorari before judgment, expediting the trial to the Supreme Court in November of 2025. Simultaneously, the court consolidated Learning Resources' challenge with a parallel challenge, V.O.S. Selections, that had already succeeded at the Court of International Trade.

The final opinion written by Chief Justice Roberts was unusually fractured. Only three sections commanded a full majority, while other portions were joined by just two additional justices, with several justices writing separately to stake out narrower or broader reasoning.

During the trial, the government argued that IEEPA’s grant of power to “regulate…importation” was broad enough to include tariffs. Furthermore, it was argued that during a declared national emergency, courts should defer to the President’s judgment about foreign and economic threats.

In expected fashion, the challenging companies argued that the IEEPA never mentions tariffs, duties, or taxation at all and that the power to tax belongs solely to Congress as directed by Article 1. The companies also relied heavily on the “major questions doctrine.” This idea is that decisions of vast economic and political importance require clear congressional authorization, not inferences from vague acts.

Eventually, the Court sided with the companies, establishing that IEEPA cannot provide justification for tariffs. Roberts wrote that “a president claiming the power to impose duties of unlimited size and duration on any country, indefinitely, needed explicit statutory backing that simply was not there”. However, three justices dissented, arguing the statute’s broad language was intended to give presidents flexibility in emergencies. 

Outside the court, the ruling triggered an enormous practical aftershock, suggesting that over 150 billion dollars in collected tariffs could be subject to refund claims. Additionally, the ruling finally asserted that the power to tax is Congress’s alone, even when a President invokes national emergency powers.